Accelerating Economic Development in Eritrea Through Information Law

Buses lineup to pickup tourists in the port city of Massawa.

Accelerating Economic Development in Eritrea Through Information Law

By Mark Darius,

A proposal for accelerating economic development in Eritrea through the development of advanced information law - using Iceland as a case study

Eritrea, like Iceland, is a geographically constrained nation. For Iceland, failed banking policies, volcanic eruptions amidst a land of fire and ice and limited resources have brought acute attention to the fundamental sources of wealth creation in a global economy. Eritrea, given its own history, shares this common understanding of local instability. A difficult path to freedom, compounded by border aggression and limited resources has meant a hard road forward. The tendency of governing bodies in similar circumstances is to evolve a reactionary policy of governance and wealth creation: to protect, to securitize the geological and physical wealth of the nation and to develop an overarching methodology of wealth creation through the re-distribution of natural resources within the global market. It should come as no surprise that the general perception of purpose of government is, first and foremost, to protect and defend. At the same time, however, the desire to protect must be balanced within the dynamics of the broader global community: what Eritrea might need from it and what Eritrea can offer it in the way of goods and services.

One of the most intriguing, intangible and yet critically important services that a nation can offer other nations is its legal constructs - and the way in which those constructs can serve as incentives for economic activity. To cite perhaps the most obvious examples, Switzerland's wealth is largely derived from the predictability of an intangible construct: its banking laws. It is those laws, and the way in which those laws are constructed (with respects to other countries) that gives Switzerland a competitive advantage when a potential client decides where to put their money.

Although nations generally think of laws as being internal agents for construction of state, the fact is that in a global world laws also serve as incentives of behaviours, as shapers of markets and as creators of value precisely because of their differences. As markets evolve the intricate relationship between laws and wealth creation is constantly tested and re-tested. In that process, gaps are uncovered and opportunities are often created for the creation of new laws.

Amongst the best examples of this in the Middle East has been the development of foreign property ownership laws in Dubai, in the United Arab Emirates. On the one hand, laws permitting foreign ownership contributed significantly to the rise of Dubai's residential real estate market. On the other hand, poorly written and relatively vague laws related to mortgages and property defaults caused a number of investors to flee the market at the first sign of instability. In both cases, laws in flux had a significant impact on the behaviour of markets.

While a number of countries have focused on wealth creation through highly specialized variances in laws related to banking, finance, property ownership and taxation, Iceland stands out as an example that may be of great relevance in Eritrea's own economic growth and evolution.

In the wake of a number of problems that have plagued Iceland over the past 4 years, the government recently decided to go forward with the full implementation of IMMI - the Icelandic Modern Media Initiative. IMMI is, in short, the first attempt by a country to create a system of information law written explicitly for an electronic and global information age. Promising to offer a degree of information protection and freedom that not even citizens of the United States enjoy, Iceland is hoping to capitalize on this development of a social architecture of information that will be a foundation for many countries for years to come. Birgitta Jonsdottir, the chief sponsor in parliament of the IMMI proposal said: "Iceland will become the inverse of a tax haven; by offering journalists and publishers some of the most powerful protections for free speech and investigative journalism in the world. Tax havens aim is to make everything opaque. Our aim is to make everything transparent.".

The IMMI website identifies the following objectives of the program:
   * the Icelandic Prize for Freedom of Expression
   * Protection from "libel tourism" and other extrajudicial abuses
   * Protection of intermediaries (internet service providers)
   * Statute of limitations on publishing liabilities
   * Virtual limited liability companies
   * Whistle-blower protections
   * Source protection
   * Source-journalist communications protection
   * Limiting prior restraint
   * Process protections
   * Ultra-modern Freedom of Information Act

While, at first glance, it seem unwise for a government to openly protect a degree of transparency that may, at certain times, even go beyond the boundaries of the 'wiki-leaks' incident, it is also promises to create new paths to wealth creation. The hope in Iceland is that corporations involved in electronic information, in all its forms, will prefer to situate themselves in Iceland because they will have a measure of legal security in their business currently unavailable elsewhere. Iceland, in a sense, is making a bet: that the security offered electronic information organizations and businesses will result in more wealth and stability for the average Icelander than the potential damage that such free movement of information may cause.

For Eritrea, following in the footsteps of Iceland may be a way to leapfrog many of the growth problems that countries in the region have encountered. The standard development model, in short, goes sort of like this: invest in physical capability to extract your natural resource wealth. The global market will buy that wealth and that revenue can then be used to develop a comprehensive state infrastructure. The problem with this model is two-fold: first of all, it is not very efficient. Even if Eritreans look across the Red Sea at Saudi Arabia's wealth - what is wealth in numbers comes at a price of tremendous inefficiency. To put this in real terms: Saudi Arabia has a population and geographic size similar to the state of Texas, but its GDP is only equivalent to that of Massachusetts. For all of its petroleum wealth, Saudi Arabia only produces 30% of the value that Texas produces. Second of all, this model falls short of a fundamental premise of wealth creation: that wealth creation is primarily a function of society, perception and mind. IE, wealth - as in the capacity to transform the world around us to promote our own prosperity - derives first and foremost from the methods by which we coordinate our common work and the methods by which we perceive ourselves within a broader state.

Practically, developing an model of information law that is comparable to that of Iceland may offer Eritrea the opportunity to leapfrog its economic development. There are a number of reasons for this specific model: a general gap in such laws in the MENA (Middle East - North Africa) region, a location in close proximity to several wealthy markets that have very poor information laws and a general location at the cross-roads of two powerful emerging markets: Africa and the Middle East. The kind of relative freedom of information that Al-Jazeera enjoys, for example, is heavily wanting in the region. There is an acute need for a local country to serve as a haven of free information. While, on the one hand, this may not necessarily be to the liking of some of Ertirea's neighbours where information is largely seen as a tightly controlled commodity, it will certainly leapfrog Eritrea's status within OECD countries and will allow it to serve as a regional model of development.

Although it may seem vague at first, the relationship between information and wealth is critical to understand: wealth as we perceive it today is different than the perception of wealth 100 years ago. Back then, wealth was primarily about the possession of physical things: of land, of buildings, of gold, of works of art, etc...To be wealthy meant to have. Today, this has changed. Wealth is now about what we can manipulate and do: how fast we can fly, where we have been, what we can experience, the level of service we can enjoy in a peculiar hotel, etc...All of this new wealth has emerged because of a tremendous explosion in literacy and information transfer. As ideas spread they build on each other, making each successive generation of inventions, innovations, technologies, etc... easier and easier to create. Nowhere has this, to use of the words of John Stuart Mill "clearer perception and livelier impression of truth" been more rapid and more powerful in its capability to create new wealth than in those places where there has been the most consistent opportunity "to create that impression of truth through its collision with error".

Eritrea is a young nation. It has a unique chance, in its first generation of leadership, to forge a path that will set an example for the region. Advancing economic development through advanced information legislation may be a step in that direction.

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